Treasuriesheld steady overnight amid looming uncertainty surrounding the Brexit turmoil. Investors turned their focus back on the central bank early in today’s session after Fed Vice Chairman Clarida suggested that the Fed’s policy is in the vicinity of neutral on interest rates. The Vice Chairman’s comments was resounding of Atlanta Fed President Bostic’s statement on his speech Thursday that perhaps the federal funds rate is not too far from neutral. Treasuries edged higher on Clarida’s dovish comments as it opposed Fed Chairman Powell’s stance who stated in mid-October that the central bank remains a long way from neutral. Clarida added that the Fed has to factor in the global growth concerns while charting its policy; the dollar weakened on the Vice Chairman’s remarks.

On the economic calendar, we received the October Industrial Production print which increased 0.10% MoM following a downwardly revised 0.20% gain in September. The market consensus called for a 0.20% increase in October, so the data was slightly weaker than expected. Moreover, the Capacity Utilization ticked slightly lower to 78.40% from an upwardly revised 78.50% in September; the September data was initially released at 78.10%. Lastly, the Manufacturing (SIC) Production rose 0.30% following an upwardly revised 0.30% gain prior, besting expectations as the market consensus called for a 0.20% increase MoM. Later today at 1:00 PM (PT), the September Total Net TIC Flows and Net Long-term TIC Flows will be released. The Net Long-term TIC Flows is expected to show $62.70 Billion after releasing at $131.80 Billion prior.

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